After World War II, there has been a significant increase in world trade which has led to an increase in foreign direct investment. The transformational flow of knowledge, idea, goods, people, and capital are creating new economic interactions and tremendous development. However, globalization has not only affected multinational enterprises rather it has affected all companies. The world has become a global village and small businesses are no longer restricted to reaching consumers in other parts of the world. The emergence of digital communication has made small business to enhance their operations and enter the international market. This has been possible through social media websites, mobile marketing campaigns, and website content. Globalization has led to increased competition since most companies want to have a share in the emerging markets. The stiff competition has made companies find ways to distinguish their operations from their competitors. This report will discuss how globalization works and the characteristics of globalization.
Globalization has led to the integration of markets and investments and trade with few hindrances that slow the flow of goods and services between countries. Besides, globalization integrates cultural elements, traditions, ideas that are traded and assimilated.
Globalization in economics: globalization leads to the exchange of a greater number of goods and services and improvement in the production methods. For instance, multinationals enterprises function across the globe with satellite offices and branches in various locations (McCann and Acs, 2015, pp.531). This insinuates that multinational organizations can stay virtually open for 24 hours a day and service customers despite their locations.
Globalization in blending cultures: globalization results in to spread of new cultures across the globe. This includes language, mode of dressing, and religion. For example, Greek culture spread across Africa, Asia, and Europe under the rule of Alexander the Great. This explains why there are many cities named after Alexander such as Iran, Egypt, turkey, and Pakistan. On the other hand, missionaries from Europe added to the globalization of Christianity (Chiro, 2014, pp.337). As the missionaries migrated from one nation to another, more people converted to Christianity.
Globalization in technology: globalization has made it possible for organizations and people to get access to online information. For example, global news such as CNN contributes to the spread of knowledge across the world. People can also access information about anything happening across the globe through online news outlets (Guy, 2015, pp.578). Mobile phones connect people across the world unlike before. There are several sites that people can use to communicate with each other despite their location such as messenger, Facebook, WhatsApp, Snapchat, and Instagram.
Liberalization: liberalization refers to the freedom of business or trade operations. Globalization has liberated business people and allowed them to begin their business operations in different geographical locations (Berden, Bergstrand and Van Etten, 2014, pp.378). For example, Google, Coca-Cola, Apple, Samsung, and Nestle are among the few companies that are established in almost every part of the globe. A country that is liberal experiences better trading. Countries that need to grow economically need the support of other countries. If a country restricts its entry policies, there will be reduced growth for their nations as well as the country with restricted entry policies. Organizations and investors are attracted to more liberal nations. Nations such as China, Germany, United States, and France and other developed countries are considered liberal for their trading policies. Contrarily, a nation like India has non-friendly trade policies and is not preferred by foreign investors. Liberalization allows free exchange of capital, goods and services, and technology between nations. This makes it possible for countries to develop and flourish by growing its economy and trade.
Connectivity: globalization assists different nations and places to be connected. Comparably, people from anywhere in the world are connected, there is a free exchange of knowledge and ideas. This is an important element of globalization since many agreements and bonds are forged between nations and societies which are significant for both participating parties. Globalization allows the international exchange of literature, technology, and culture (Rowley, 2017, pp.8). As connectivity increases, the business between nations flourishes which results in additional national revenue of the prospective nation. Besides, when people are exposed to new cultures around the world, their lifestyles are impacted positively. Connectivity also affects the standard of living people. Therefore, better connectivity is essential for society, industries, and businesses. Industrialization relies on good connectivity and many jobs are dependent on industrialization. Consequently, excellent connectivity will improve industrialization hence more jobs for people. When people have jobs, their living standards will improve and there will be more money in circulation.
Economic globalization: globalization has led to an increase in the economic interdependence of different economies of countries across the world. The increase in the exchange of goods and services, technology, culture, and capital has affected the economies of respective nations as well as the world economy (Potrafke, 2015, pp.552). The main aim of globalization in businesses is to have controlled taxes and tariffs for the traders. Economic globalization comprises of globalization of production which includes obtaining goods and raw materials from specific sources from different nations to benefit the cost difference (Mutalemwa, 2015, pp.164). The complicity of international standards has more accessible and efficient. For instance, containerization has reduced the cost of transportation and also supported the increase in international trade.
Free trade: globalization allows countries to trade freely without interferences from the government. Free trade leads to the growth of trade between nations. Thrive in the trade leads to the growth of economies of countries carrying out trading activities. This leads to overall growth in the GDP of the participating countries. Free trade also increases cooperation among nations involved in the trade.
Political globalization: this refers to the prosperity and the growth of the political system across the world in both size and complexities. The main aim of political globalization is to reduce the significance of the country as a state and raise other aspects on the political front. Globalization led to the rise of multilevel governance (Li and Li, 2015, pp.435). Multilevel government expresses the concept that several authorities are associating at work in the global political economy. The multilevel government states the association between the domestic and international levels of authority. Globalization has made it possible for people to have multiple citizenships. Some NGOs have begun global missions such as the Melinda and Gates foundation. The Bill and Melinda gates foundation is committed to funding some of the world’s impoverished and increasingly growing nations. In a different circumstance, North Korea has embraced isolationist policies (Dye, 2015, pp.449). The birth Korean government makes it difficult for foreigners to enter their country. The state strictly monitors all the activities that are done by foreigners as well as their citizens.
Learning: globalization opens doors for knowledge and experience to stream in from different nations. Through globalization, people have been able to understand things that they were not familiar with before (Flew, 2016, pp.37). Both developing and developed nations have something new to learn from exploring different countries. For instance, Chinese food is very popular across the globe which was not known back in the 1800s (Wang, 2015, pp.2059). Due to globalization, the United States of America adopted the Chinese cuisine which is part of many Americans every day. Comparably, there was no idea of burger in china in the early 1800s, and due to globalization, the American companies’ Wendy’s burgers and McDonald’s made their way to China. Therefore, exposure to rich and cultures assists in the development of societies because new concepts and ideas are incorporated and old ideas and concepts eliminated.
Production advantage: since many nations are open to trading, organizations can build a manufacturing plant in a location where land and labor are relatively economical. This reduces the production cost of the organization and they gain a competitive advantage in the industry. Besides, the company can get raw materials from the nation where the plant is set up at a lower rate hence giving the company a production advantage (Brondoni, 2014, pp.21). Nonetheless, this creates employment opportunities for the citizens of the nation where the plant is built. When people are employed, their living standards are increased. Furthermore, the country will experience economic growth by collecting taxes from the people employed at the plant. The money collected may be used to build social amenities such as schools and health centers. For example, apple hones were being manufactured in china but since 2019, India started manufacturing apple phones, and Taiwan started manufacturing Google phones.
Conclusion
Globalization has transformed the world into a better place. Globalization has led to liberalization in trade operations across the world. The characteristic of globalization includes liberalization, connectivity, free trade, economic, political globalization, learning, and production advantage. These results in economic growth. Through connectivity and learning, countries have been able to gain ideas from other countries that have assisted them to run their business operations. On the other hand, free trade and liberation have made it possible for countries to trade freely. Free trade has led to overall growth in the GDP of the participating countries. Political globalization has revolutionized the political system across the world both in size and complexities. Due to political globalization, people have able to acquire citizenship with more than one country.
References
McCann, P. and Acs, Z.J., 2015. Globalisation: Countries, cities and multinationals. Global Entrepreneurship, Institutions and Incentives: The Mason Years, 45, p.371.
Wang, N., 2015. Globalisation as glocalisation in China: A new perspective. Third World Quarterly, 36(11), pp.2059-2074.
Li, J. and Li, S., 2015. New trends of Chinese political translation in the age of globalisation. Perspectives, 23(3), pp.424-439.
Dye, D.T., 2015. New Labour, new narrative? Political strategy and the discourse of globalisation. The British Journal of Politics and International Relations, 17(3), pp.531-550.
Chiro, G., 2014. Cultural and linguistic diversity in Australia: navigating between the Scylla of nationhood and the Charybdis of globalisation. International Journal of Multilingualism, 11(3), pp.334-346.
Flew, T., 2016. Evaluating China’s aspirations for cultural soft power in a post-globalisation era. Media International Australia, 159(1), pp.32-42.
Rowley, C., 2017. Whither globalisation and convergence? Asian examples and future research. Asia Pacific Business Review, 23(1), pp.1-9.
Guy, F., 2015. Globalisation, regionalization and technological change. The handbook of global science, technology and innovation, pp.575-596.
Brondoni, S.M., 2014. Global Capitalism and Sustainable Growth. From Global Products to Network Globalisation. Symphonya. Emerging Issues in Management, (1), pp.10-31.
Mutalemwa, D.K., 2015. Does globalisation impact SME development in Africa?. African Journal of Economic and Management Studies, 6(2), p.164.
Potrafke, N., 2015. The evidence on globalisation. The World Economy, 38(3), pp.509-552.
Berden, K., Bergstrand, J.H. and Van Etten, E., 2014. Governance and globalisation. The World Economy, 37(3), pp.353-386.
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